Non-Fungible Token

I define Non-Fungible Token as a specific document who's ownership is recorded into a blockchain, or other distributed ledger.

In this case, ownership is defined as a bidirectional mapping from an NFT and a public key or identity. This digital ownership by itself does not constitute ownership in a legal or lawful sense, but simply associating a public key with a hash of a document.

Lawful Ownership

Legal or lawful ownership can be established by following certain conventions, and mapping agreements between minds to agreements demarcated in code and cryptographic statements.

Cryptographic Statements

Cryptographic statements

Certain cryptographic statements are possible using Public Key Cryptography. A cryptographic statement is a statement expressed in code that with reasonable probability proves someone in possession of a private key signs and states a statement is true.

For Example:

{"statement":
    {
        "owner": "email@example.org",
        "item_owned": {
            "name": "iPhone",
            "serial_number": 1234567,

        }

     },
    "signed_by": "shai7exahthiiFoh0iephie3soagiloo",
    "signature": "eemohdae8aez9uedie6ohZ3jieY1dahv"
 }

In this fictitious example, the statement says in code that the something named iPhone with a serial number of 1234567 is owned byemail@example.org. The signed by is a public key with a digital signature. If these were real values, one could verify that this full statement (including the signature and signed by) could only be produced with knowledge of the private key matching the public key signed_by.

If the private key is controlled, and exclusively known by a conscious entity, we can make the assumption that whatever conscious entity created and signed this document does testify to its accuracy. Of course people can lie, so whether it is true or not is a different story.

If conscious entities assign meaning to machine readable documents, then lawful statements can be made in code.

Mapping Cryptographic Statements to Lawful Statements

For a cryptographic statement to have the power of Law in the Real World, people using them must agree what they mean.

In the above example, what does owner: "email@example.org" really mean? Does it mean that whoever controls the email address email@example.org is the owner of the given iPhone? What happens if someone guesses the password to the email address? Are they now the lawful owner of the iPhone?

Perhaps there is another mutually agreed upon document describing how to establish the true owner of a digital asset, in this case the email address? Perhaps we agree that to own an email, you need ownership of an NFT signed by the email provider that is also signed by at least 5 people?

The details of how to establish ownership of digital entities, and how ownership of a digital entity maps to ownership of a physical entity is up for debate and ultimately up to the people using the NFTs to decide. If people cannot agree, then the technology will not magically save us.

References

Non Fungible Token - Wikipedia